Did Lieberman Just Kill the Public Option?

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Joe Lieberman

Senate majority leader Harry Reid, D-Nev., says that "Joe Lieberman is the least of [my] problems" in passing health reform with a public option. I'm not so sure.

Connecticut Sen. Joe Lieberman, who was formerly a Democrat but who is now an independent, announced today that "if the bill remains what it is now, I will not be able to support a cloture motion before final passage." In other words, Lieberman will support a filibuster. "I can't see a way in which I could vote for cloture on any bill that contained a creation of a government-operated-run insurance company," Lieberman said.

One largely unspoken assumption behind Reid's quest to get an "opt out" version of the public option through the Senate is that he doesn't really need 60 votes for the health reform bill itself. He just needs 60 votes for the cloture motion prior to final passage. Once a filibuster is cut off, health reform can pass with 50 votes (the 51st being Vice President Joe Biden, president of the Senate). One reason Reid's gambit looked so promising as recently as yesterday was that Lieberman, despite his previously stated opposition to the health reform bill even without a public option (i.e., as passed by the Senate finance committee), had agreednot to support a filibuster against it. It now appears that Lieberman either changed his mind or was misunderstood.

Reid seems to think he can keep Lieberman onboard by allowing him to "be involved in the amendment process." In his 2008 book The Good Fight, Reid writes that he and Lieberman differed on the Iraq war but "on other issues, he's always with me." But can Reid really count on Lieberman this time? In recent years Lieberman has not shown himself to be an especially trustworthy character. (TheNew Yorker's Hendrik Hertzberg has the details here and here.)

Ezra Klein of Washingtonpost.com and Jonathan Chait of the New Republic both point out that Lieberman's reason for opposing the public option—that it's too expensive—makes no sense, because the public option actually lowers the cost of health reform by exerting downward competitive pressure on the private-insurance premiums whose purchase the government would subsidize. The Congressional Budget Office's scoring of the Reid proposal is expected to show this. But any illogic in Lieberman's position strikes me as evidence not that Lieberman is likely to change his mind when he becomes better acquainted with the facts but, rather, that Lieberman has already decided facts shouldn't get in the way of his opposition.

Why would Lieberman want to sink health reform? Klein points out that in the pretty recent past, Lieberman has supported the general goal, if not the specifics, of Obamacare. But consider Lieberman's political situation. He is no longer a Democrat. That means he no longer has a political base. In the future, he will have to rely more on constituencies and on cash. The White House suggests that Lieberman wouldn't dare alienate voters by opposing health reform. But what's the most cash-rich constituency in the Nutmeg State? The insurance industry, which is headquartered in Connecticut and employs 64,000 people.

At the moment, insurers probably aren't too pleased with Connecticut's other senator, Democrat Chris Dodd, because Dodd is a prominent advocate for the public option. As I've noted previously, Dodd, during the past 20 years, received $2.3 million in contributions from insurers—more than any member of the House or Senate except John McCain, R-Ariz. During that same period, Dodd collected $774,000 from health insurers, ranking second only to House Minority Leader John Boehner, R-Ohio. Lieberman, even though he's from Connecticut, has during that same period had to settle for 14th place in both insurance-industry contributions and health-insurance-industry contributions. Blocking the public option might allow Lieberman to displace Dodd as "the senator from Aetna."

Support for this hypothesis may be found in Lieberman's timing in announcing his opposition to the Senate finance bill. It was Oct. 13. That was one day after the insurance lobby released its study dumping on the finance bill. Until then, it seemed likely the insurers would either support the finance bill (which contained no public option and was poised to make them half a trillion dollars richer) or keep mum. Lieberman's quick seconding of the insurers' opposition suggests that he will permit no daylight between himself and the insurance lobby.

Further evidence can be found in the substance of Lieberman's argument that the public option would bust the budget. It may be nonsensical, as Chait and Klein say, but it isn't randomly so. It's the same argument the insurers are making. "Probably all people who have health insurance are going to see their premiums go up," Lieberman said, "because there's going to be cost shifting as there has been for Medicare and Medicaid." The proposition that cost savings achieved through public insurance programs never impose financial efficiencies on doctors, hospitals, and private insurers but, instead, lead doctors and hospitals to shift more of their costs onto private insurers lies at the heart of the insurance lobby's opposition to both the Senate finance bill and the public option. But the health insurers haven't persuaded most economists, and the Congressional Budget Office thinks the cost-shifting argument against health reform is incorrect.

If I'm right that Lieberman is determined to line up behind the insurance industry, then there's no hope he will ever support any version of the public option, even on a procedural cloture vote, because there's no hope insurers will support a public option. And if health insurers decide in the end to oppose health reform without a public option, Lieberman will oppose that, too. Please, God, let me be wrong.